| Author | Content |
AZchic
Tucson, AZ
April 18, 2008
02:15 PM Post #4827744
| I have been very diligent on paying off quite a bit of credit card debt. I will be paying off the remaining balance on my last credit card this summer! Thank goodness but I have been in this situation 2 times before...every time I pay off my credit card debt, I always leave one card open and sure enough-rack up the debt again which always leads to getting more credit cards. I am thinking of canceling all credit cards and just doing savings for emergencies but everyone is saying how bad an idea this is for my credit score.
So, my question is this. Given my past history of living beyond my means because I have no restraint when it comes to credit cards, should I keep one open for the purpose of credit history or should I cut the cord? Opinions welcome! |
Jazzpunkin
Springfield, OH
(Zone 5b)
April 21, 2008
12:32 PM Post #4841166
| AZ. It does help you credit score to have credit cards. But it doens't help your score if you have a lot of debt! so it's a catch 22. One thing you could try if you haven't already is to take your credit cards and lock them away. That way they aren't easily avaiable for spur of the moment purchases.
GO ahead and do that savings for emergencies. Put the amount you have been paying towards your cards into the savings until you have a comfortable amount.
If you find you need the convenience of a credit card for online purchases or paying for gas at the pump etc you cna create a checking account with a debit card attached just for those type of purchases. Keep it seperate from your regular checking account and only swap over money when you need it. It takes diligence to stay on top of debit cards but you can't get yourself into debt with them like a credit card. |
jkom51
Oakland, CA
(Zone 9b)
April 22, 2008
11:25 AM Post #4846577
| IMHO, you should NOT cancel your cards. Credit agencies look at your debt ratio as a percentage: you have "x" number of cards totaling $xx amount, and you owe $x as a percentage of that total.
Canceling your cards can lower your overall score. Owing $2K on a single $10K limit card is a higher debt ratio than owing $2K on an overall $50K limit combining several cards.
Jazzpunkin has the right idea. I do this as well. Lock them away, and consider them for emergency use only. Or, rotate your card usage, especially if one of the banks offers you a "special interest deal", which is pretty common these days. |
Shellsort
Orlando, FL
(Zone 9b)
April 22, 2008
11:28 AM Post #4846612
| I have a few cards open but i have destroyed the actual cards. This way my credit looks good but i am unable to spend when tempted. I seem to be one of those people that if i have the card with me i am more likely to use it. |
AZchic
Tucson, AZ
April 22, 2008
02:16 PM Post #4847529
| Thanks for the opinions. I have locked away the cards and hope this works. It is so difficult to have restraint. When I know that they are there...I always find a way to use them. Hopefully, having them hidden away will make things easier. I heard one suggestion of putting them in a safety deposit box at the bank so that I would have to physically go to get the card. Such extremes we go to! |
Jo_in_Tx
Sugar Land, TX
April 23, 2008
05:06 PM Post #4853559
| You can also freeze them in a large block of ice in the back of your freezer.
When mine are paid off, I'm cutting them up and closing the accounts. Open accounts makes a person more of a target for identity theft, and since I never want to use credit cards again, I don't care if my credit score takes a small hit. I have my house mortgage, and with enough of a down payment, I'd still be able to qualify for a loan on a vehicle.
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AZchic
Tucson, AZ
April 23, 2008
06:23 PM Post #4853818
| Jo- What made you decide to end your "relationship" with credit cards? Just out of curiosity...was it spending or wanting to avoid all the drama associated with credit card use? |
Jo_in_Tx
Sugar Land, TX
April 24, 2008
08:12 PM Post #4859756
| Because I realized that carrying a balance on anything other than a mortgage or a car is financial suicide in the long run. If you have to carry a balance, you really can't afford it. Better to save, and use that savings to fix things, buy a new dishwasher, etc.
Besides, I'm at the point where I hate the way corporations are ruining this country, and I don't feel like putting more money in their corporate coffers. Twenty-something percent interest rate? geesh That should be against the law. I don't carry anything with that kind of interest rate, but just the idea that they get away with legal theft makes me want to cut up my cards! |
LindaTX8
NE Medina Co., TX
(Zone 8a)
October 08, 2008
04:11 PM Post #5647971
| Sounds like you have a good head on your shoulders! Personally, I don't think even one credit card is a good thing unless you know you will pay off the entire balance on time every single month. |
quiltygirl
Wildomar, CA
(Zone 9a)
November 30, 2008
12:58 PM Post #5844254
| AZchic - We have been going by way of the no credit cards. DH is not fiscally responsible with them! When I was single 17 years ago I had a bunch of cards, but only used one and pd it off each month. Enter DH and credit cards to the max.
I listen to Dave Ramsey on TV, radio or podcast and really makes sense about getting debts all paid off and not using credit and seriously cutting down all costs. Pay your savings the amount that went to cards, pay off car & home. Our society wants us to have a debt score, but savings and cash can also put you in the driver's seat. |
twiggybuds
Moss Point, MS
(Zone 8b)
December 01, 2008
03:06 AM Post #5846552
| I also listen to Dave Ramsay. It always amazes me how many really high income people are in debt up to their eyeballs. He deals with all kinds on his show and I always learn something about the workings of creditors and how to deal with them. He has a website that can probably direct you to a radio station near you, http://www.daveramsay.com. I highly recommend it.
I'm working toward being debt free as fast as I can. It feels so good to pay them off and forget them.
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FrillyLily
Lebanon, MO
December 11, 2008
02:01 PM Post #5881936
| You could keep the card for emergencies, but request the company lower your credit limit. We had a card issued to us for $8,000. WOW! We called and lowered the amount to $2,000. You could get a card that has the limit you want, so you even if you are tempted, you won't be able to spend more than that. Also don't carry the card with you. Leave it at home. You might consider getting a card with say a $500 limit or maybe $1000 just to carry in case you have some sort of car trouble away from home, especially if you commute to work or travel a lot. An emergency like that can add up and if you are short on cash you will be in trouble. |
JuneyBug
Dongducheon CpCasey
South Korea
(Zone 4b)
December 12, 2008
12:20 PM Post #5884695
| Friends had car trouble on vacation - used most of the $5000. credit limit to get the transmision worked over. Saved the trip and all of the stress by having paid off credit cards and both Visa and MC with higher limits. |
FrillyLily
Lebanon, MO
December 12, 2008
05:13 PM Post #5885452
| WOW! I think I would have found alternate transportation, and then did some thinking about whether it was worth putting that kind of money into. Of course we usually only drive older cars, that wouldn't be worth that much anyway. The other thing is so shop around when you need expensive car repair, I have found there can be a big difference in costs.
Being out of state, can scream, Help me I'm desperate! LOL that isn't good either :( |
JuneyBug
Dongducheon CpCasey
South Korea
(Zone 4b)
December 12, 2008
06:40 PM Post #5885768
| They were in two overstuffed cars driving near Killeen, TX (from Rolla, MO) There were two competent mechanics in the cars, but OMG, "Help me, I'm desperate and not from here" In a military town, no less.. well, they paid on the high side of reasonable, but it was a newish, full size car and they couldn't justify dumping it and using their vacation to buy a new car to get home in. They usually buy wrecked cars and fix them up for all of the family.
I guess the point is: having a couple of zero balance/high limit credit cards can save considerable stress.
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LindaTX8
NE Medina Co., TX
(Zone 8a)
February 13, 2009
11:24 PM Post #6136042
| DH got me a credit card after I used my debit card # one time online to order something and some crook later on ended up with enough of my info to start using it online. Fortunately, I noticed something wrong the same day the info was used when I was checking on my account. Only one charge for a few dollars had actually gone through, the rest were pending. I went to the bank and they did the paperwork and had me call about the one charge that went through. That one was refunded. And the debit card was cancellled that day. The bank handled everything else, but the lady advised me against debit purchases online. So that's why I have a credit card. They at least have a bit better protection for online purchases. |
quiltygirl
Wildomar, CA
(Zone 9a)
February 16, 2009
12:49 PM Post #6146670
| Good advice abut the online purchases. There are some people, however, that cannot control their use of a card if they have it in their possession (or have the number). |
LindaTX8
NE Medina Co., TX
(Zone 8a)
February 16, 2009
01:31 PM Post #6146918
| Oh, I know that. Been there and done that a long time ago. But I use cash and checks now for just about everything. We pay the card off every month if there are any charges. |
quiltygirl
Wildomar, CA
(Zone 9a)
February 16, 2009
04:59 PM Post #6147757
| Good idea. I have been using the Online Banking option at our bank, Wamu. They do not charge to use it and I go in, fill in the blanks for the amount I am paying that week, or month (initially had to complete all info for company names, account #'s and their mailing addresses). I can do a print out of what I paid that day, or the month or by company. Pretty cool. You can even make payments to companies or individuals you don't have accounts with (i.e. church tithe, babysitter, etc). DD's friend said so many people are making payments by computer, e-cards and e-mail that postal carriers like her Dad are losing their jobs or reduced hours. That part I feel bad about. |
LindaTX8
NE Medina Co., TX
(Zone 8a)
February 16, 2009
05:34 PM Post #6147926
| I can't believe bills are why USPS wants to reduce hours and eliminate Saturday delivery. Bill payments were such an extremely small part of what they ever delivered that it couldn't have generated that much revenue. I think it's more about less packages and less junk mail. In this very unstable economy, the junk mail is decreasing as companies tighten their belts or go out of business. The packages are less for that reason and because the USPS rates are too high. Not to mention that to send packages to rural areas like ours, it just makes so much more sense to use UPS or any of the similar companies that will deliver right to the houses. That's what we prefer...and I see those trucks coming and going all the time out here. If a package ends up going back to the company that sends it because that person couldn't get around to driving into town in time before the P.O. sent it back (or because it was sent back no such address, like what happens to our P.O. packages sometimes), it usually costs that business money to re-send it. And BTW, I still pay all my bills the old fashioned way. I don't trust the online bill paying, so I'll continue doing it by mail. |
ecrane3
Dublin, CA
(Zone 9a)
February 16, 2009
05:44 PM Post #6147973
| I've had way more bills go "astray" and not make it to their final destination when I used to mail them--and when a check didn't show up at its destination then I had to send a new check and either pay $20 or so to stop payment on the first check, or hope that I had enough money in my account to cover the first check if it showed up later and got cashed. Since I started paying everything electronically all my payments show up where they're supposed to be when they're supposed to be there. |
FrillyLily
Lebanon, MO
February 16, 2009
06:09 PM Post #6148101
| I still use the old fashioned method as well.
I don't trust 'technology'.
You know before the internet, ID theft was hardly heard of, at least to me.
It's easier to hand it to my my carrier.
I have a few bills I pay with electronic withdraw. But I don't do any of it over the internet.
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quiltygirl
Wildomar, CA
(Zone 9a)
February 16, 2009
06:30 PM Post #6148208
| I understand the reticence of paying online. My sister is funny. She won't do any banking online, but since she works, finds it easier to do gift purchases online. Still have to type that card number in... |
LindaTX8
NE Medina Co., TX
(Zone 8a)
February 16, 2009
07:41 PM Post #6148534
| I'm more concerned with someone getting my info and using it than with the payment getting lost. It happened already with the debit card info. |
Tir_Na_Nog
Houston
United States
(Zone 9b)
March 01, 2009
05:20 PM Post #6207540
| Jo and Linda, I'm with you! I've heard people argue that closing your cc lowers your credit score but I could care less. It likely wouldn't be LESS than that same score was when I had little credit and applied for that credit card! You can still get credit!
Now that I've tackled the hard reasons for needing credit: house and car, I could care less how my score is "damaged" by the closing of a credit card.
That said I do keep ONE card (balance paid in full as needed) for online purchases. You could use your bank/debit card as the credit but for theft this is my reason for a regular cc. I've had my number compromised more than once and yet only used in online transactions.
I love to shop online for a better price on books and kids toys and products so when I get a good bargain that route I'll use my cc then check the statement carefully. Most recently I had several charitable donations made on the card. Something I do not do by cc but by check. Inquiring was smart---turns out that number had been compromised online somehow and the cc co canceled the card and issued a replacement.
The technique in the scam: use a cc number for small charitable donations, once you receive an email "thank you" verification you know the cards valid and the thief can use for any purchase. The donations started small and always ended in odd change (so hoping to keep your balance odd so you don't "notice" it right away), even just a few bucks and increased in value from there up to $100+.
A great reason not to use your debit card online but have a cc just for online purchases. |
